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Major retailer pulls out of Ely High Street as company looks to online sales to prosper
‘The group has closed 24 stores in the last decade without a significant impact on profitability’
Ely is the latest branch of Hughes Electrical to announce its closure following hot on the heels of their decision to close stores at Newmarket and Spalding. Customers have been told the High Street, Ely, branch will close on February 17.
It is the latest in a series of closures by the major East Anglian electrical retailer and the company says the move to online retailing has been behind the decision to close a handful of stores.
But the group, overall, remains healthy and profitable says its annual accounts.
“The group has closed 24 stores in the last decade without a significant impact on profitability,” says Hughes Electrical in its annual accounts released just before Christmas; the overall trading picture is positive.
In 2022/23 the Hughes Electrical Group showed a turnover of £144,108,274 – up from £139,610, 196 – although the overall profit before tax figure of £4,305,800 was lower than the previous year of £6,494,963.
The directors said, in their annual review, the electrical retail industry “was caught in the pincers of a falling market and a rising cost base during the 222/23 financial year making for difficult trading conditions”.
But it described its “out-performance” in terms of turnover as being possibly through a diversified income stream.
“Sales to consumers were compromised by the cost-of-living crisis but this helped boost the rental market while corporate sales through the Trade and Washco businesses both grew strongly”.
Their statement added: “The group operates from 14 fewer locations and employs 110 fewer people than it did pre-Covid, so the overhead base is more manageable. Indeed, this overhead base is not forecast to rise in 2023/24 despite an expectation of 8 per cent average rate of the Consumer Price Index.
“Overall, the directors feel that the group is in a better position than most retailers to manage the cost-of-living crisis and to bounce back quickly from it.”
Among principal risks and uncertainties, the directors list:
1: Cost of living crisis reducing sales while increasing overheads, thus causing a significant fall in profitability
2: Supply bottlenecks caused by chip shortages or war causing a fall in stock availability and loss of sales
3: Sterling collapse causing stock replenishment costs to rise – 95 per cent of stock is bought in sterling from supplies who “typically hedge for up to a year at which point their ranges are replaced with new models”.
4: More sales online as expense of high street business with the result that some existing stores become unprofitable. “The directors frequently review store profitability and are aware of locations most at threat.
“The group has closed 24 stores in the last decade without a significant impact on profitability.”
5: Difficulties in attracting and retaining staff impacting on operational efficiencies and profitability. The directors say they have worked on, and innovations included buying two holiday chalets for staff to use for free.
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